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no other documentation for these transactions. Other payments
were evidenced by contracts, leases, and buy-sell agreements,
which Shindel reviewed. Lacking expertise in foreign tax
matters, Shindel made inquiries in order to determine the tax
obligations arising from these payments. He received the
impression that Tompkins, who was preparing most of the tax
returns at that time, was not knowledgeable about the reporting
and withholding requirements for payments to foreign persons.
Nor was Shindel satisfied that his clients were sufficiently
sophisticated to determine the applicable requirements.
He sought expert advice from two outside attorneys, one a senior
tax partner at a Michigan law firm and the other a tax partner at
a Washington, D.C., firm. His consultations with these attorneys
concerning the payments at issue began either in early 1990 or in
late 1991 or 1992. The attorneys advised him orally of their
views; neither furnished Shindel a written opinion. Shindel
advised Modern of the problems he had identified. Petitioners
made no further payments to the related foreign corporations
after 1991.
Meanwhile, the IRS began an audit of several of petitioners
in 1990. The audit was conducted on Modern's premises by
Revenue Agent Berniece Petzold (Petzold). In the late winter or
early spring of 1993 Petzold questioned Shindel regarding certain
canceled checks she had found that had been cashed abroad. They
discussed the reporting requirements applicable to these
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